Avoiding Estate Tax
Inheritance taxes and death taxes are basically the same thing as estate taxes. Estate taxes are something you pay the government, probate fees are paid to your attorneys. They have nothing to do with each other.The IRS doesn’t actually collect estate taxes from most families, because their estates are too small.Even larger estates usually don’t have to pay estate taxes, because there are a number of legal tools that can help eliminate any estate taxes actually payable.Estate taxes are often called voluntary taxes, because if you plan for them you don’t have to pay them.The rich don’t lose a dime when dad dies, so why don’t you do your estate planning and avoid all of the estate taxes?
An estate tax is actually imposed on every dime of a dead person’s estate.Most families don’t have to actually pay any estate taxes, because the IRS gives them a "credit" which can be used to pay a set amount of the estate tax charged.The exact amount of property an individual can pass without paying an estate tax changes quite frequently. The amount of credit you get to apply toward paying the estate tax changes. The estate tax rates and estate brackets usually don’t change.
In the IRS code, the gift tax and estate tax are "unified", thus the credit is called the "unified credit". Because the unified credit changes often, you will have to look up the unified credit for the year you are interested in. The amount of property that generates an estate tax equivalent to the amount of unified credit available to offset the estate tax is called the "exemption equivalent ". When people say that you can pass one million dollars without an estate tax they are really saying that the unified credit at that time is the amount of credit needed to offset the tax imposed on the first one million dollars in estate value.
A person’s estate includes the house, all other real estate, personal property, stocks, bonds, all retirement accounts, IRAs, life insurance face value, the value of their little business, and every other asset you can think of. In almost all estates, life insurance is included in the estate evaluation, and it is subject to the estate tax.With inflation ballooning estate values, many families are surprised to find out that there will actually be some estate tax paid when mom or dad die. The estate tax rate on the first dollar, where there is actually an estate tax payable, is close to 50%. So, an estate that is only a half a million dollars above the exemption equivalent can generate a payable estate tax of almost a quarter of a million dollars. So what if you pay the attorney his $10,000. If you can get an extra $250,000 to your family, it is money well spent.
When you use Lee R. Phillips’ FREE DVD, Using the Law to Make Money and Protect Your Assets, with his award winning book, Guaranteed Millionaire, you will learn how to remove your life insurance from any estate tax exposure. With the book and DVD, you will learn how a couple can use a trust to move twice as much property to their heirs with having any estate tax issues. Numerous options are available to you if you can’t eliminate estate taxes by simply getting your life insurance out of your estate and passing twice the exclusion equivalent to your family. In the FREE DVD and book, you will learn about LLCs, Corporations, Family Limited Partnerships, and other legal tools an attorney can use to solve your estate tax problems and get some asset protection.Order Guaranteed Millionaire and the FREE DVD, Using the Law to Make Money and Protect Your Assets, now.
